Correlation Between Powell Max and 111

Can any of the company-specific risk be diversified away by investing in both Powell Max and 111 at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Powell Max and 111 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Powell Max Limited and 111 Inc, you can compare the effects of market volatilities on Powell Max and 111 and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Powell Max with a short position of 111. Check out your portfolio center. Please also check ongoing floating volatility patterns of Powell Max and 111.

Diversification Opportunities for Powell Max and 111

-0.28

Correlation Coefficient

Powell Max  111

Very good diversification

The 3 months correlation between Powell and 111 is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Powell Max Limited and 111 Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 111 Inc and Powell Max is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Powell Max Limited are associated (or correlated) with 111. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 111 Inc has no effect on the direction of Powell Max i.e., Powell Max and 111 go up and down completely randomly.

Pair Corralation between Powell Max and 111

Given the investment horizon of 90 days Powell Max Limited is expected to under-perform the 111. But the stock apears to be less risky and, when comparing its historical volatility, Powell Max Limited is 1.57 times less risky than 111. The stock trades about -0.09 of its potential returns per unit of risk. The 111 Inc is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest  61.00  in 111 Inc on September 21, 2024 and sell it today you would earn a total of  27.00  from holding 111 Inc or generate 44.26% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Powell Max Limited  vs.  111 Inc

Powell Max Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Powell Max Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

111 Inc

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in 111 Inc are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, 111 demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Powell Max and 111

The main advantage of trading using opposite Powell Max and 111 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Powell Max position performs unexpectedly, 111 can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in 111 will offset losses from the drop in 111's long position.

The idea behind Powell Max Limited and 111 Inc pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.